Chicago Global Capital
  • Invoice Factoring
  • Asset-Based Lending
  • Purchase Order Finance
  • Merchant / ACH Cash Advance
  • Microloans
  • Invoice Factoring
  • Asset-Based Lending
  • Purchase Order Finance
  • Merchant / ACH Cash Advance
  • Microloans
 

Asset-Based Lending

Asset-Based Loans are, as the name would imply, loans that are based on the assets of your company.  Traditionally, asset-based loans are those secured by your accounts (invoices) and by your on-site inventory.  In some cases asset-based lenders will also use equipment as additional collateral. 

Unlike factors who actually purchase your accounts weekly, asset-based lenders lend against your assets.  Your business will therefore need a certain level of established credit history to qualify for asset-based lending, although typically much less than for a traditional financial statement loan as provided by most banks.

Asset-Based Lending Secured by Accounts, Inventory, and Equipment

How Asset Based Lending Works

Asset-based loans are typically utilized by manufacturers and distributors that face problems of inventory finance.  Those operating in the service sector such as staffing companies, guard services, landscaping companies generally are not eligible for asset-based loans until they reach a relatively large size. 

Each week, your asset-based lender will provide you with a lending certificate or "lending base" calculated on the amount of your accounts receivable outstanding and on site inventory.  This lending base will be modified each periodically based on your sales activity. 

Asset-based loans are often termed "revolving lines of credit" and your business will be responsible for weekly reports and occasional audits to insure the integrity of the credit line.  Asset-based lines are most often much larger than factoring facilities with $100,000 usually being the minimum and over $1,000,000 being more the norm.

Want to find out more regarding our capabilities?  Why not request a FREE and complimentary copy of our informative guide:  "When Banks Say NO!  The Small Business Guide to Factoring."  Its FREE, from the professionals at Chicago Global Capital.